Hong Kong Taxation

Hong Kong is world renowned for its simple and low tax regime, making it one of the most business-friendly jurisdictions in the world. The tax structure of Hong Kong is relatively straightforward compared with some of the more complex systems used in other countries in the world. There are two main revenue legislations in Hong Kong:

  • the Inland Revenue Ordinance; and
  • the Stamp Duty Ordinance.

The Ordinance is administered by the Commissioner of Inland Revenue. There are three distinct and separate headings under this Ordinance: Profits Tax; Salaries Tax and Property Tax.

Hong Kong has simple taxation system in terms of types of taxes and administrative procedures

  • NO capital gains tax
  • NO dividend tax
  • NO estate duties
  • NO sales taxes and VAT
  • NO annual net worth taxes and no accumulated earnings taxes on companies which retain earnings rather than distribute them
  • NO tax on bank interest income
  • For corporate, only one tax         Profits Tax
    Two-tiered profits tax rates regime: 8.25% on the first HK$2M, 16.5% on the excess of the first HK$2M.
  • Territorial Principle, possibility of ZERO tax proper tax planning
Profits Tax
Salaries Tax
Property Tax
Stamp Duty
Part 1 of Scale 1

Applicable to instruments of residential property executed on or after 5 November 2016:
A flat rate of 15% of the consideration or value of the property (whichever is the higher)


Part 2 of Scale 1

Applicable to instruments of residential property executed on or after 23 February 2013 but before 5 November 2016 and instruments of non-residential property executed on or after 23 February 2013


Scale 2

Scale 2 Any residential property that acquired by a Hong Kong Permanent Resident who does not own any other residential property in Hong Kong at the time of acquisition will be subject to rates below:


Special Stamp Duty (SSD)

SSD on disposal of residential properties (acquired either by an individual or a company regardless of where it is incorporated) on top of the current ad valorem property transaction stamp duty has become effective from 20 November 2010. Any residential property acquired on or after 20 November 2010, either by an individual or a company (regardless of where it is incorporated), will be subject to the SSD at the following penal rates:

Property acquired between November 20, 2010 and October 26, 2012:

Property acquired on or after 27 October 2012:

Buyer's Stamp Duty (BSD)

With effect from 27 October 2012, any residential property acquired by any person (including a company incorporated) except a Hong Kong Permanent Resident will be subject to the BSD. BSD is charged at a flat rate of 15% on the stated consideration or the market value of the residential property (whichever is the higher), on top of the existing stamp duty and the special stamp duty, if applicable.